DoorDash Inc., the
food delivery platform, plans to cut nearly 1,250 jobs, over 6% of its entire
employee strength as a part of its execution to put a cap on its costs amid a
demand slowdown in the market on Wednesday.
accelerated its hiring during the peak COVID-19 pandemic to serve the rising
number of orders from home-struck people, but the numbers dropped significantly
after the pandemic due to multiple factors which cautioned markets for
inflation. Consequently, inflating the company’s tussle with expenses.
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“We were not as
rigorous as we should have been in managing our team growth. That’s on me. As a
result, operating expenses grew quickly. Given how quickly we hired, our
operating expenses – if left unabated – would continue to outgrow our revenue,”
said Tony Xu, CEO DoorDash.
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The company’s shares
advanced over 9% to $58.25 on the day it announced layoffs, while it plunged
about 64% in the last year from $161.62.
reported a higher-than-expected net loss of $295 million in the quarter that
ended in September 2022, against $101 million in the year-ago period. This
doubted markets about the growth prospect of delivery platforms as economies
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The company currently
has around 20,000 employees onboard. It has a market cap of over $22 billion.
Walgreens Boots Alliance and Shake Shack are delivery partners with DoorDash. It provides restaurant food delivery services
connecting customers with local businesses.
Last month, the
British food delivery platform Deliveroo also warned on its sales growth to be
at the lower end of its previous forecast, citing lowered orders due to rising
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DoorDash adds up to
the list of multinational American companies that have laid off thousands of
employees in recent weeks as they buckle up for an expected economic slowdown.
Most prominent on the list are Amazon.com Inc, Meta Platforms Inc, and Twitter
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Andy Fang, Evan Moore,
Stanley Tang, and Tony Xu co-founded the company in January 2013. It is
currently headquartered in San Francisco, California.